Funding pressure continues as schools plan for deficit budgets

A majority of schools are either running a budget deficit already or plan to have one within the next three years, new research shows

More evidence has emerged of the financial pressure facing schools after a snapshot survey found that 84 per cent are either already running a budget deficit or plan to have one in the next three years.

Furthermore, among the money-saving strategies being employed by schools, the survey finds that increasing class sizes and pupil-to-staff ratios are the most common.

The findings form part of a report published this week looking at how schools have been forced to change or adapt working practices to overcome funding pressures.

The survey, which involved 168 responses from mainly secondary headteachers or executive headteachers, found that only 16.2 per cent do not anticipate running a deficit in the next three years.

Meanwhile, 32 per cent said they were already running a deficit, 30 per cent are forecasting one within the next year, and 22 per cent within the next three years.

Published by SSAT and Arcadis, the report – Triumph in Adversity? How financial restraints are driving schools to do things differently – aims to share financial best practice more widely.

State schools have been facing rising costs for some time, including increased employee pension contributions, inflation, and the government’s one per cent pay award to teaching staff.

In April, the Institute of Financial Studies said that schools are facing the most severe budget cuts since the 1970s and predicted reductions of at least seven per cent in per-pupil funding by 2020.

And the financial pressure on schools looks set to continue as plans for a new, fairer National Funding Formula have been put on hold following the Brexit vote in June. It is now thought that the new formula will not be in place until 2019 at the earliest.

In her introduction to the report, SSAT chief executive Sue Williamson states: “Some estimates suggest that schools will see a 10 to 12 per cent decrease in their budget in real terms between 2015 and 2020.

“Times are tough and schools are being forced to make very difficult decisions to balance the books, while simultaneously being under on-going pressure to improve pupil outcomes. Some are already considering redundancies; most are having to review their curriculum offer, look at ways to generate income and cut any non-essential spending.”

As well as increasing class sizes, other common money-saving practices reported in the survey include reducing the key stage 5 curriculum by cancelling courses that do not tend to recruit high numbers, reducing additional pupil interventions or axing work experience programmes.

Some schools are also reducing the number of qualified teachers and increasing the number of unqualified teaching staff. Teaching assistant numbers are also being cut as well as the amount of non-contact time for teachers.

A small number of schools in the survey said they had introduced the use of “super classes” of 60 or more pupils, while others are offering more online and distance learning.

The report states: “In addition many respondents commented that they are being forced to reduce department budgets, which creates particular challenges at a time of significant curriculum change. Some schools are asking parents to pay for textbooks and resources; others are using electronic textbooks and sharing resources with other schools.”

The report also aims to share best practice actions and strategies that schools are using to save money and raise extra income.

The most popular of these is leasing out school premises, while other strategies include selling off assets, out-sourcing back-office support, and charging for services such as nursery provision and catering.

Working more closely with other schools is also proving effective, the report finds, with schools co-purchasing, co-recruiting and sharing back-office support. Indeed, the report urges schools to “realise the benefits of scale” by making the most of working in multi-academy trusts, federations or umbrella groups.

It states: “The level of savings will depend on the size and type of MAT, federation or trust. But across core services such as finance, HR, payroll, audit, energy and asset management planning, you could reasonably anticipate savings of three to eight per cent for each individual school.”

The report also offers schools ideas for improving capacity within teaching and learning, managing buildings effectively, and running central support services.

Among a number of case studies in the report are details of how Blue Coat CE School in Coventry tackled a £1.4 million debt.

Jane Durkin, the school’s executive business manager, describes strategies including using their main hall, theatre and conference suite for weddings and conferences, letting out facilities to science clubs, adult learning and private tutoring companies, and letting out their city centre car park for local events. Letting income at the school has now doubled to £100,000 a year.

Ms Durkin said: “All financial contracts are being renegotiated. We have saved £12,000 a year on our printer contract, and the same amount on gas and electricity. We’re now looking at our catering and cleaning contracts – and being very forceful in negotiations.”

Meanwhile, with the Apprencticeship Levy coming in this academic year, Tracey Jones, headteacher of Lord Grey School in Milton Keynes, has taken on a number of apprentices, including trainee chefs, ICT staff and sports technicians.

The school has also invested £40,000 in order to create facilities that enable all alternative provision to be brought in-house. In time, this service could be offered to other schools and thus become an additional revenue stream.

Also included in the report is advice from Sue Baldwin of the Education Funding Agency and Gillian Allcroft from the National Governors’ Association.

The report – Triumph in Adversity? How financial restraints are driving schools to do things differently – can be downloaded via http://bit.ly/2cjwHrj